December 4, 2022

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Maldives shelters slapped sanctions on Russian billionaire yachts

Maldives shelters slapped sanctions on Russian billionaire yachts

  • Maldives will not actively pursue yacht confiscation – sources
  • Sources fear the impact of Russia’s sanctions on the tourism industry
  • ‘Out of reach’ thinking about confiscating yachts

(Reuters) – A day after billionaire Andrey Melnichenko was included in the European Union’s sanctions list on March 9, his A-engine superyacht stopped broadcasting its position while in Maldives waters, according to marine data.

In Italy, four days later, the authorities seized another of Melnichenko’s ships – the largest sailing yacht in the world, the value of which was estimated by the Italian financial police at 578 million dollars.

Turning off devices that allow authorities to track a ship’s whereabouts can help keep yachts out of their sight.

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But in the Maldives, the chances of action against sanctioned oligarchs are slim anyway, according to interviews with dozens of people familiar with internal discussions about how to respond to US and European financial sanctions, including government ministers, diplomats and experts in the country’s superyacht industry.

The cautious approach taken by the authorities in the Maldives to enforce the sanctions imposed after the Russian invasion of Ukraine means that the Indian Ocean island nation has emerged as an attractive destination for wealthy Russian yacht owners.

Melnichenko’s ship is one of six yachts linked to Russia that has skied between the Maldives, southwest India, since Western countries hit some oligarchs with sanctions in response to the invasion on February 24.

Three of the yachts have blocked their live locations, changed reported destinations or moved to international waters, according to data provided by MarineTraffic, a company that provides marine analytics. Read more

The country’s attorney general, Hussain Shamim, said in an interview that the idea of ​​seizing the yachts is “far-fetched”, as the legal system in the Maldives is not strong enough, adding that authorities cannot easily confiscate visiting ships unless a crime has been committed under local law. Law.

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Requests for comment on the deactivation of Motor Yacht A’s locators and their current ownership status, which were sent to Melnichenko’s spokesman as well as his charitable foundation, fertilizer producer EuroChem Group and coal company SUEK – two companies he resigned from in March, went unanswered.

Last month, his spokesman told Reuters that the businessman would object to the sanctions, adding that he had no political affiliations.

The 119-meter (390-foot) yacht A features crystal furniture and three swimming pools, photos published by her builder gallery, and has been appraised in specialty boating publications for $300 million. Melnichenko’s wife said that she was engaged in interior design.

A Melnichenko spokesperson admitted in 2017 in a statement to the BBC that the sailing yacht is owned by his boss. Both ships were designed by the famous French designer Philippe Starck.

safe shelter

Sources consulted by Reuters in the Maldives said that the situation in the Maldives highlights the difficulty faced by Western powers in stifling the wealth of the oligarchy targeted by sanctions due to the Russian invasion of Ukraine, where several countries around the world still provide safe havens.

The United States, Britain and the European Union have imposed wide-ranging sanctions on Russian President Vladimir Putin, lawmakers and businessmen in the wake of the invasion, which Moscow describes as a special military operation aimed at “disarming” and “disarming” Ukraine.

European countries have confiscated property including villas and boats, and authorities have confiscated at least six ships they said belonged to dozens of oligarchs affected by the sanctions.

Peter Stano, a spokesman for the European Commission, said the sanctions are not binding on non-EU countries or non-aligned countries such as the Maldives, although he called on all countries to abide by them.

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The Maldives voted to condemn the Russian invasion at the United Nations and publicly asserted that it would aid international efforts against the sanctioned Russians.

In fact, officials say they are concerned about the economic impact of deterring wealthy Russian visitors.

With its off-white beaches and about 1,200 islands, most of which are uninhabited, the Maldives is a favorite of the wealthy.

From a secluded region with scarce natural resources other than tuna and coconuts, tourism has propelled it into a middle-income country over the past three decades. Per capita GDP before the pandemic was more than $10,000 – the highest in South Asia.

Tourism accounts for about a third of the $5.6 billion economy. Data from the Russian Tourism Ministry showed that Russians spent above average and made up by far the largest number of arrivals in January, the last month before the Ukrainian invasion.

Since then, the number of Russian arrivals has fallen by 70%, said Tourism Minister Abdullah Mausom. He wants it to be reversed.

“Our entry policy is very open. The Maldives is an open country,” he said.

“No one can touch it”

Abdul Hanan operates Seal Superyachts Maldives, providing fuel and food to ship owners including Russian customers.

Hanan said yachts usually cost hundreds of thousands of dollars a week and that about half of his customers are Russians. Like other luxury yacht owners, he said, they often spend the winter in the Indian Ocean and the summer season in Europe.

Hanan said he has met some Russian owners on their mega yachts since the sanctions were announced, describing them as “normal and humble people” who are going through a difficult moment. He did not say whether people were subject to sanctions.

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“Right now, they are trying to keep the yachts in international waters,” he said, where they will likely remain idle for months at a time.

“Then, no one can touch it.”

He declined to give the clients’ names, citing confidentiality.

A spokesman for the Maldives Customs Authority, which monitors maritime traffic in its waters, did not respond to a request for comment on the number of Russian-owned yachts currently in existence.

kind diplomacy

An official familiar with the Maldives’ international financial arrangements said that while Maldives institutions would find it difficult to ignore the US Treasury’s warning that non-seizure of Russian assets would affect their access to US financial markets, no such message was sent.

Asked about locations including the Maldives, Andrew Adams, head of a US task force aimed at freezing oligarchs’ assets, told Reuters that Washington was seeing cooperation “at an all-time high,” even as oligarchs try to hide yachts, planes or other property. mobile in countries they believe to be secret.

However, two Western diplomats said that forcing the politically unstable and financially constrained Maldives to make a difficult choice about sanctions could push it closer to China. A previous government had strengthened ties with Beijing although relations with the West and traditional ally India are now improving.

“We are aware of the economic risks involved” for the Maldives if they take a hard line, one diplomat said.

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Additional reporting by Alasdair Pal and Mohamed Junaid in Mali Additional reporting by Sarah Lynch in Washington, Jan Stropchevsky in Brussels and Dasha Afanasyeva in London; Editing by Frank Jack Daniel

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